National oil firm slashes pump price by N20
The Nigerian National Petroleum Company Limited (NNPCL) has implemented another reduction in the pump price of Premium Motor Spirit (PMS), commonly known as petrol, effective Monday, January 5, 2026.
This latest adjustment saw the price drop to ₦815 per liter at NNPCL retail outlets, down from the previous rate of ₦835. The ₦20 reduction was observed at several stations across the Federal Capital Territory (FCT), including locations in Wuse Zone 6, Wuse Zone 4, the Keffi-Abuja Road, and the Kubwa Expressway.
Reports indicate that the new price regime was authorized on Sunday evening and fully implemented by Monday morning. This move is part of an ongoing trend of price adjustments by the state-owned oil firm as it navigates a highly competitive downstream sector. While the reduction has been welcomed by some motorists, it highlights the dynamic nature of the deregulated market where prices are increasingly influenced by competition and supply stability.
Despite the ₦20 cut, NNPCL’s new price of ₦815 per liter is still approximately ₦79 higher than the rates offered at MRS filling stations. MRS, which is currently backed by supply from the Dangote Refinery, continues to sell petrol at ₦739 per liter nationwide. This significant price differential has created a shift in consumer behavior, with many motorists opting for cheaper alternatives at independent and major marketing outlets.
Ongoing price war in the downstream sector
The recent reduction is the second significant cut by NNPCL in less than a month, following an ₦80 reduction on December 19, 2025, which brought the price down to ₦835. This “price war” was largely triggered by the Dangote Refinery, which dramatically slashed its gantry price to ₦699 per liter in late 2025. The refinery’s aggressive pricing strategy forced other major players, including the national oil company, to review their rates to maintain market share.
Analysts observe that the entry of locally refined products has fundamentally changed the landscape of the Nigerian fuel market. For the first time in decades, the sector is experiencing genuine price competition rather than the rigid, subsidy-backed pricing of the past. Aliko Dangote, President of the Dangote Group, has consistently advocated for lower prices, stating that his goal is to make fuel more affordable for Nigerians while discouraging dependence on imports.
However, this competition has placed immense pressure on independent marketers who may have purchased stock at higher historical rates. Some depot owners have expressed concerns about potential losses, while others have called for more transparency in the ex-depot pricing models. Despite these internal market tensions, the Group Chief Executive Officer of NNPCL, Bayo Ojulari, has assured the public that the current market dynamics will ultimately benefit the end-user.
Regional price variations and consumer impact
While the ₦815 per liter rate is prominent in Abuja, fuel prices in Nigeria continue to vary slightly across different geopolitical zones due to transportation and logistics costs. In Lagos and other coastal regions, prices are often marginally lower than in the northern states. The National Bureau of Statistics (NBS) has noted a steady decline in the average retail price of petrol over the last quarter of 2025, a trend that has continued into the first week of 2026.
| Location | NNPCL Price (₦) | Rival Outlet/MRS (₦) |
| Abuja (FCT) | 815.00 | 739.00 |
| Lagos State | 810.00 | 739.00 |
| Kano State | 835.00 | 745.00 |
| Port Harcourt | 820.00 | 740.00 |
The reduction in fuel prices is expected to have a “trickle-down” effect on transportation costs and, eventually, the price of food and other essential commodities. Inflation, which peaked in 2024, has begun a slow descent, and lower energy costs are seen as a critical driver for further stabilization. Motorists interviewed at various filling stations expressed a mix of relief and hope that the “price war” would continue until the rates reach an even more comfortable level.
Future outlook for fuel prices in 2026
Looking ahead, the Nigerian government remains focused on its goal of achieving total energy self-sufficiency. The full operational capacity of the Dangote Refinery, alongside the anticipated completion of the Port Harcourt and Warri refinery rehabilitations, is expected to maintain downward pressure on prices. The Petroleum Industry Act (PIA) continues to serve as the legal framework for this market-driven approach, where the government no longer dictates prices.
There are, however, potential headwinds on the horizon. A proposed 5% fuel surcharge under the Harmonised Tax Act is slated for discussion later this year, which critics warn could offset some of the gains made through competition. Additionally, fluctuations in global crude oil prices and the exchange rate of the Naira against the Dollar remain external factors that could influence future adjustments.
For now, the NNPCL has reaffirmed its commitment to being a “supplier of last resort” while operating as a purely commercial entity. The company aims to increase its crude production to 1.8 million barrels per day in 2026 to further support domestic refining needs. As the market regulates itself, Nigerians are encouraged to remain vigilant and patronize outlets that offer the best value for their money.
